Continental Pours Cold Water on Breakup Speculation
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Continental AG is signaling it will stop short of making further drastic changes as Europe’s second-biggest car-parts supplier doubles down on a restructuring to improve disappointing performance.
The manufacturer, with three key areas including tires and hoses, is under pressure to turn around its automotive business to revive squeezed margins for a unit that this year is expected to break even. Last year’s operating return of 5.6% is trailing behind the company’s medium-term target of 8% to 11%.
“Our first priority is to have all the three pillars and strategic sectors of Continental under one roof, leveraging the synergies especially within the automotive arena on technology,” Chief Financial Officer Katja Duerrfeld said. “Looking at the performance especially on the automotive side, we cannot be satisfied with the current setup.”
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The comments come on the heels of recent reports suggesting Continental is exploring carving up its businesses. Handelsblatt reported last month that Continental could consider an initial public offering of its autonomous mobility unit, while Manager Magazin reported it could sell or list its ContiTech and automotive assets.
Continental has been soldiering on with a deep restructuring that could see it shed or transfer some 30,000 jobs globally to keep pace in the electric shift. The maker of automotive safety and electronics systems has seen its share price slump 38% over the past 12 months amid efforts that so far have included spinning off its Vitesco powertrain unit last year, reorganizing reporting structures and shaking up its management board.
“We have nothing else planned, and we’re moving into the future with this structure,” CEO Nikolai Setzer said March 9.
